Cannabis Stocks Up In Smoke After Hexo Withdraws 2020 Guidance
Despite a series of positive industry catalysts, the landscape is looking a lot grimmer for many cannabis companies in 2019.
HEXO Corp (NYSE:HEXO) (TSX:HEXO) stock fell over 22% Thursday after the company released preliminary fourth-quarter net revenue results. The preliminary figure of CA$14.5 million ($10.9 million) to CA$16.5 million ($12.4 million) missed guidance that called for CA$24.8 million.
The major sell-off was associated with company’s decision to withdraw its 2020 earnings guidance.
"HEXO imploded on a huge quarterly revenue miss and the retraction of guidance, and Village Farms priced an equity offering," cannabis market analyst Alan Brochstein told Benzinga.
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Five other cannabis companies experienced sell-offs Thursday as Hexo plummeted.
Tilray (NASDAQ:TLRY) was down 13.49% at the close, although it was gaining some of that loss back in the after-hours session. Canopy Growth (NASDAQ:CGC) saw a 10.56% loss in the regular session. The company announced Thursday that Constellation Brands, Inc. (NYSE:STZ) CFO David Klein as its board chairman.
Cronos Group (NASDAQ:CRON) shares were down 7.23%.
Sam Masucci, CEO of ETF Managers Group, which also runs the ETFMG Alternative Harvest ETF, said on CNN this week that "the sector is very volatile and that's to be expected given the nascence of the business. It's still a new market."
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